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FAQ

What is a SAFE agreement?

A SAFE (Simple Agreement for Future Equity) is an investment contract that allows startups to raise funds from investors in exchange for future equity, without setting a valuation at the time of investment. It was originally developed in Silicon Valley to simplify early-stage fundraising.

A SAFE works by granting investors the right to receive company shares at a future financing round, usually at a discount or with a valuation cap. This makes it a founder-friendly alternative to traditional convertible notes, as it avoids interest rates and maturity dates.

What is the EU SCALE agreement?

EU SCALE stands for Simple Convertible Agreement for Loan to Equity. It is a standardised, pan-European convertible loan instrument designed to be the pragmatic “bridge solution” for early-stage funding in Europe. Unlike complex traditional notes, it is a simple 2.5-page document with no interest and no cash repayment – just future conversion to equity.

Why did the project shift from "EUSAFE" to "EU SCALE"?

Initial consultations revealed that Europe is not yet ready for a direct adaptation of the US-style SAFE due to deeply fragmented legal, accounting, and tax realities across 27 countries. European investors often find the US SAFE model too ambiguous regarding its status as debt vs. equity. We pivoted to the SCALE model because a convertible loan is a structure that European legal systems and investors already understand and trust.

Why do I need a Europeanised agreement instead of a standard US SAFE?

Using a US-style SAFE in Europe often leads to “tax nightmares” and legal uncertainty. For example, a SAFE might be treated as a gift or immediate taxable income in some EU jurisdictions. EU SCALE is built to avoid these “traps” by aligning with European accounting practices and tax regulations.